A pipeline bringing oil from Iraqi Kurdistan to Iran, and then onto the Persian Gulf: it’s an idea that could change the economic and political balance in the area. And it’s an idea that has been floated before, albeit unsuccessfully.
But after an October 2015 visit to Iran by Nechirvan Barzani, the Prime Minister of the semi-autonomous northern region, and the easing of Western sanctions against Iran, a pipeline via Iran is looking closer to becoming a reality.
On March 2, Iraqi Kurdistan’s representative in Iran, Nazem Dabbagh, returned to Iraqi Kurdistan to meet with Barzani. A letter had been sent to the Iraqi Kurdish government asking them to seriously consider the idea of a pipeline and NIQASH has heard that the pair discussed the issue at their meeting. A positive response was sent back to Iran and apparently now preliminary talks are being held on the new cooperation between the two.
The fact that Turkey took so long to repair what is basically an economic lifeline for Iraqi Kurdistan could be a sign that the Turkish are not pleased about an Iranian pipeline.
There has also been talk about Iranian loans to cash-strapped Iraqi Kurdistan, which, like the rest of Iraq, is teetering on the brink of an economic breakdown.
The pipeline itself is not a new idea. Rumour has had it that there’s been a confidential agreement between Iraqi Kurdistan’s two major parties on the subject of pipelines since 2010. The Kurdistan Democratic Party, or KDP, is traditionally, diplomatically closer to Turkey and would build a pipeline that could take Kurdish oil to the world through that country. The second pipeline would go from the area dominated by the Patriotic Union of Kurdistan, or PUK, though Iran – the PUK area of influence is traditionally diplomatically and geographically closer to Iran - and then onto the rest of the world.
This would mean that Iraqi Kurdistan had two options for exporting oil, without being dependent on either powerful neighbour. Two pipelines would balance up the political equation in the area.
And the Turkish pipeline – the Ceyhan pipeline - now exists, taking crude oil from Kirkuk to the port of Ceyhan. Locals suggest that perhaps the second part of this secret deal between the Kurdish political parties is going to be realized.
Of course, any steps taken will require the support of other politicians in Iraqi Kurdistan, which has its own borders, parliament and legal system. However most locals don’t think the idea will face much resistance; the PUK is already expressing its support for the plan as are other Iraqi Kurdish political parties, including the opposition Change movement and the Islamic parties.
"Iran is interested in building an oil pipeline from Iraqi Kurdistan because it wants to revive its economy,” suggests Samad Khajyani, a local energy and oil analyst. “On the other hand, Iran also has a major problem with Saudi Arabia. The two sides can use oil against each other. That’s another reason Iran is thinking of building this pipeline.”
However Kharajyani believes that another of Iraqi Kurdistan’s neighbours will be upset by any such pipeline. Turkey and Iraqi Kurdistan signed a 50-year contract to export Kurdish oil through Turkey and Kharajyani believes the Turkish will be displeased if the Iranians also get a Kurdish pipeline.
This is most likely why some Iraqi Kurdish commentators are suggesting that a recent closure of the Ceyhan pipeline, was due to the Turkish wanting to send a warning message to their Kurdish partners about the region’s increasing desire for independence from Baghdad and this potential further step in the direction of more economic independence.
As local news organisation Rudaw reported: “At least three major incidents have temporarily disrupted export of Kurdish oil through newly constructed pipelines to the Turkish port …The last incident which has completely halted the flow of oil to Ceyhan port, took place in mid February inside Turkish territory with Ankara blaming the Kurdistan Workers Party, or PKK, for the sabotage. The PKK, however, has categorically denied any involvement but the stoppage has cost Erbil millions of desperately needed dollars”.
The PKK originates from inside the Kurdish-majority parts of neighbouring Turkey and Turkey categorises it as a terrorist group.
The fact that Turkey took so long to repair what is basically an economic lifeline for Iraqi Kurdistan could also be a sign that the damage was political as well as physical. Marina Ottaway, a Kurdish expert at the Wilson Center, told Foreign Affairs magazine. “It’s not impossible that the Turks are sending a warning to Iraqi Kurdistan [about their desire for independence] saying, ‘you can only go so far before we yank your leash’.”
A senior official from the PUK spoke to NIQASH about the matter on condition of anonymity. “The Iraqi Kurdish have the right to establish relationships around oil with any country they want to,” the official said during a confidential meeting on the sides of the recent Sulaymaniyah Forum. “But that doesn’t mean it would end the relationship with Turkey. The Kurdish authorities respect that agreement.”
“Talks with Iran about a pipeline are only at the very beginning,” the official noted. “The two sides are still studying the details of any plan. However, there are certainly serious attempts by both sides to make this a reality in the future.”
There are plenty of unanswered questions about the details of the plans – NIQASH approached Abdullah Akreyi, who coordinates the relationship between Iraqi Kurdistan and Iran, but his office did not want to make a statement on the subject.
Some details have been shared through other channels. The planned pipeline would start in oil fields on the borders of Iraqi Kurdistan’s Sulaymaniyah province. This includes Karmayan and Koi Sanjaq and would mean that oil from anywhere nearby could end up being exported through the Iran-Iraqi Kurdistan pipeline.
There are a number of oil companies working in this area but transporting oil must be done by tanker. An estimated 150,000 barrels are thought to be heading out of Iraqi Kurdistan and through Iran by tanker daily, through three road crossings.
There are also two proposed routes for the pipeline. One would take the oil via the Hawraman area, east of Sulaymaniyah city. The other would utilize the Parvez Khan border crossing, southeast of the city.
As for further details, including the cost of the pipeline, its length, or who will pay for, or build it, these are not yet clear.
“Up until now we haven’t had any official information about an oil pipeline to Iran,” Sherko Jawdat, the chairman of the Natural Resources Committee in the Iraqi Kurdish Parliament, told NIQASH. However Jawdat did agree there was “an understanding” between the Iraqi Kurdish region and Iran about the matter.
However Jawdat also pointed out that any such project would not be able to go ahead unless the Iraqi Kurdish parliament decided it was in the best interests of the Kurdish citizens. Personally he said he thought it was a good idea, saying that Iraqi Kurdistan should diversify both sources of funding and crossing points for its oil.